British Experts about the Difficult Situation European Investors Got Themselves Into
Shareholders of Barclays demanded that the bank's top executives stop investing in non-renewable energy. The European Investment Bank stated that starting from the end of 2021 they would no longer support the majority of projects linked to the use of fossil fuels. These statements, coupled with a warm winter for the second year in a row, and thus perfectly aligned with the global warming trend, should in theory convince Europeans that authorities are aiming to develop a climate-neutral economy - and not on paper but in real life.
Most experts, however, believe there is no need to rush, and moving towards set targets should be a gradual process and performed step by step. Partly because making business on oil & gas is a highly-profitable activity, but also due to energy security guarantees, since no other energy source is capable of substituting hydrocarbons within the next few decades.
The logical outcome is that environmentalists are right in pushing for the reduction of harmful emissions and installation of solar panels and wind farms. But they are wrong in urging to transform the energy industry at the fastest rate possible - such demands are nothing but populism. As of now, humanity is not ready for a full-scale energy transition but is in dire need of increasing production volumes of electricity.
To discuss the problems faced by the oil and gas industry, hundreds of companies gathered in Aberdeen, Scotland, where they came to visit Subsea Expo, one of the world's leading industry conferences. The exhibition was organised by Subsea UK and Scottish Development International (SDI), with the assistance of the DIT (the UK Department for International Trade). A number of companies came to Aberdeen to present their subsea exhibits, including BP, Norwegian Offshore Rental AS, C-Kore Systems Limited, Ansys, Atlas Copco, and others. Altogether, 185 exhibitors and 6500 delegates participated in the event.
Over 85 experts were involved in discussions on such issues as energy transition and intersectoral collaboration. According to Mhairidh Evans, Principal Analyst at Wood Mackenzie, annual investments in offshore wind farms will double between 2020 and 2025 and reach £38 billion globally. Regardless, most of the revenue generated by the subsea industry still originates from oil and gas projects, which makes the situation tricky for European investors. On the one hand, all businesses are required to minimise environmental impact. Still, on the other hand, renewable energy sources, heavily promoted by the British authorities, are yet unable to fulfil the energy demand.
Neil Gordon, Chief Executive of Subsea UK, points out that oil & gas remain the largest source of income for the UK subsea industry:
Total UK revenue coming from maritime economic activities has increased to almost £7.8 billion while revenues generated via offshore renewable energy development amounted to £1.82 billion.
Delegates of the International Competence Centre for Mining-Engineering Education under the auspices of UNESCO also came to Aberdeen to participate in Subsea Expo 2020. They held numerous talks with senior executives of companies participating in either business sessions or the exhibition itself, with the primary aim being to discuss cooperation opportunities in engineering training and joint academic research.
Dmitry Tananykhin, Associate Professor in the Department of Development and Operation of Oil and Gas Fields at Saint-Petersburg Mining University:
One of the most exciting exhibits here was an ROV presented by Aleron Subsea. It is made to operate at depths of up to 3,000 meters and used for maintaining subsea production units. We also reached an agreement with Aleron Subsea's executives that their specialists give lectures to the Mining University's students on the topic 'Using robotic systems in maintaining SPS during oil extraction'.
Mikhail Dvoinikov, Head of the Department of Well Drilling:
An interesting topic, the discussion of which may translate into future scientific collaborations with some of the exhibitors, is processing the associated petroleum gas for oil & gas platforms, ending with gas separation into CO2 and H2 particles. At the panel sessions here, we discussed this topic and other issues as well, such as storage and transportation of hydrogen. Xodus Group has been working in this sector of 'Blue Economy'. The Mining University has been addressing similar issues at the Competence Centre in the Engineering and Technology for the Field Exploration Activities in the Arctic, the structure established within the University.
Yury Zhukovsky, Director of the Centre for Digital Technology:
First of all, this topic of subsea digitalisation is of particular interest to me. I am also interested in the work of such industry companies as, for instance, WFS Smart Waters-Smart Cities. Energy and hydrocarbon development, if we talk about underwater mining, requires investing in scientific research and delivering innovative solutions capable of protecting materials in aggressive environments, constructing subsea production facilities and tools to maintain them. Handling these technologies demands new approaches to machine construction, infrastructure and tools building. The cost of mistakes at the design stage is very high - whether in terms of money or environmental risks. Therefore, not only methodological calculations but also dynamic simulations carried out via specialised software applications are necessary. One example is Ansys that allows optimisation of constructions or even entire systems through predicting subsea behaviour. Using this method helps save on exploitations costs and reduce the risks of accidents, which is crucial for investors. Software products like Ansys are highly-demanded, as shown by annual revenues of the company. In 2015, they made $940 million, while in 2019 the figure amounted to $1.3 billion. The company's share prices showed similar progress: $89 per share in 2015 and $270 in 2019. Consecutively, salaries of those specialists who have the appropriate skills to use modern tools have been growing, the same as the demand for highly-qualified engineers who know how to use advanced technologies and software.
Viacheslav Zyrin, Head of the Delegation of the International Competence Centre for Mining-Engineering Education under the auspices of UNESCO :
Subsea Expo 2020 was organised to draw attention to the oil & gas industry. The conference's value is in highlighting the fact that the industry still maintains a strong position in the energy sector of the region and showing that there is a potential and innovativeness within the industry. The oil & gas sector is now facing strong pressure due to the increased share of renewables and negative attitudes expressed by environmentalists and casual activists. But the large-scale events in which businesses, universities and research centres participate - they prove that innovations in mining safety and highly competent engineering staff are the factors that enable the petroleum industry's sustainable development and stable functioning. On this matter, the event's organisers and the International Competence Centre for Mining-Engineering Education under the auspices of UNESCO share the same opinion.
Earlier, delegates of the Competence Centre paid a visit to the University of Aberdeen where they met Alexander Kemp, Professor of Petroleum Economics at the University of Aberdeen Business School. Prof Kemp explained why the Scottish city would remain the oil capital of Europe in the future and assured that the popularity of the UK's fifth-oldest university would stay high both among British and international students.